North Korea cranks out hundreds of tons of rare earth elements every year and some of them have been traded in South Korea, according to a researcher at a local private think tank.

International Institute for Strategic Resources founder Kim Dong-hwan made the remarks on the significant metals on Monday during a telephone interview with The Korea Times.

``Excluding China, there are only a handful of refineries for rare earth metals in the world and one of them is in Hanheung where some 600 tons of rare earth elements are estimated to be produced annually,’’ Kim said.

``All of them are exported to China while some of them are shipped to South Korea through illegal channels. The amount cannot be compiled but it is fact that the North Korean products are traded here.’’

The 42-year-old said that North Korean rare earth metals gained popularity in the South as global prices shot up of late. ``North Korean metals are not so good in quality but their prices are reasonable,’’ he said.

Asked about the source for the data, however, Kim refused to reveal them due to sensitivity of the issue.

Rare earth metals refer to a collection of 17 chemical elements in the periodic table. They are indispensable in producing high-tech products and eco-friendly technologies such as electric cars, wind turbines and liquid crystal displays.

Korea, home to the world’s top flat-panel manufacturers, does not produce any and relies completely on imports. Last year, all of its 2,600 tons in demand were met by shipments from China.

As the value of the metals skyrocketed, concerns have swirled that the Seoul administration should diversify their supply but the hitch is that China is in charge of churning out about 97 percent of the global production.

Kim said the Hamheung plant, situated some 200 kilometers northeast of Pyongyang, is decrepit while generating a great amount of pollutants without proper facilities to process them.

To deal with the situation, Kim urged the Southern investors to participate.

``When proper equipment is provided, both the quantity and quality of the North’s rare earth metals would substantially rise to meet the demand of South Korea,’’ he said.

``Then we will be able to prevent the toxic byproducts from harming the Korean peninsula as well as secure an alternative supply channel of the rare earth elements. The North would benefit greatly from the scheme.’’

However, Kim said that the win-win solution is easy to outline but hard to put into practice because of the political standoffs between the two nations. ``Despite problems, we need to start the process of cooperation,’’ he said.